Bang for the buck
Most patients have their medicines funded with just a fraction of the Combined Pharmaceutical Budget (CPB). This means that last year medicines for 10% of all patients used $640 million (80%) of the $795 million budget. These are people with high health needs and PHARMAC provides them with access to the most effective yet expensive medicines.
This is possible because nine out of ten people have their medicine paid for from just 20 percent of the total budget. This extremely broad coverage is made possible by the low prices negotiated by PHARMAC. New Zealand enjoys some of the lowest medicine prices in the world, achieved through commercial negotiations and mechanisms such as the PHARMAC tender for off-patent medicines.
This efficient use of the budget means PHARMAC has more funding available for more highly-priced medicines.
The same analysis shows the very high budgetary impact of these largely new medicines, and the comparatively small patient numbers involved.
The chart above shows that over time, a decreasingly smaller group of people are using a greater proportion of the budget. In 2011, one in 10 patients used 70% of all funds, now they use 80%.
Last updated: 8 August 2017